demand for shipping industry there will be a significant increase in the logging industry as well. The demand for all materials required to build ships will increase as the demand for the shipping industry increases and expands. •Forwards linkages: industries that facilitate the expansion of another industry but is not considered to be a direct input -- more lucrative than backward linkages •Ex. Insurance for the shipping industry. Having insurance on cargo in the event of a storm while crossing the Atlantic •Good carrier industry generates lots of backward and forward linkages •The difference between growth (income growth) and development often comes down to how much or how many of the backward and forward linkages within an industry you are able to capture. •Economic development when you not only generate income from carrier industry but also capture the majority of the backward and forward industries Reasons why the Southern economy fell behind •Strong sense of aristocracy, planters were trying to re-create the semi-medieval social order of the European feudal system •Planters were committed to slavery, they could not see the economic order of the South without slavery (monopoly of slavery) •Monopoly of slavery •The British rejected monopoly as a principle of organization •Adam SmithThe Wealth of Nations(1776) profound effect on British economics, the market principle was by far more superior than the monopoly principle in terms of economic development and efficiency (labor markets more productive and efficient than slave markets because slave markets eliminated competition) •1834 Britain declared slavery illegal •1842 Britain declared market style competition as the basis of the British economy •Being watched closely by Moses Brown, John Brown •Noticing that the escort of the economy that was the first to adopt the principles of Adam Smith was the textile industry Civil War •Douglas North •Regardless of the civil war, the industrialization would have overcome the traditional southern economy •Louis Hacker •Argues that without the civil war, it would have been impossible to establish a unified American economy between the Northern and Southern economies.